- Category: Business
- Published on Friday, November 04 2011 01:59
- Written by Rod Hughes
- Hits: 638
If nothing is more certain than death and taxes, it is as certain that tax reform will raise cries of pain from many sectors, especially if it is designed, as is true of the one in debate by lawmakers here, to raise revenue.
This week, the national banks added their voices to those of foreign businesses doing business in free zone industrial parks here in disputing the wisdom of some of the new proposed tax measures.
In the case of the banks, they are worried about two provisions in the bill. One is a 14% ad valorum tax on fees levied on financial transactions. Even more onerous to Banco Nacional officials is a plan to place a 15% tax on unearned income, applied to certificates of deposit.
Banking officials say that the scheme could well cause Costa Ricans and foreign residents to move their investment capital abroad where the tax would not apply.
Meanwhile, some of the biggest foreign businesses in Costa Rica have added their protest to that of such giants as Intel in opposing a change allowing taxes to be levied on new firms establishing themselves in free zone industrial parks.
These companies put their warning in writing in a letter to President Laura Chinchilla: Proctor & Gamble, Hewlett-Packard, Panasonic, Hospira, Aegis, Alergan, Sykes, Baxter, Intel, Dole, Bridgestone-Firestone and others.
The proposed tax would be applied to new companies after 2013 establishing themselves in the zone where current companies enjoy a tax-free status. (See previous story.)
The firms argue that such a measure would seriously compromise the country's competitiveness with other nations wanting to attract foreign investment.